Reuters soars on approach, Thomson touted as bidder

By Mark Potter and Gavin Haycock

LONDON (Reuters) - News and financial data provider Reuters RTR.L said on Friday it had received a takeover approach, sending its shares up almost a third, with Canadian publisher Thomson TOC.TO widely touted as the mystery suitor.

Canada's Globe and Mail newspaper reported on its website that Thomson TOC.N was in talks to buy London-based Reuters, citing sources close to both companies.

Reuters declined to name its suitor, while Thomson had no comment. But Reuters second-largest shareholder ValueAct said depending on the offer, it would support a sale and a merger with Thomson would be a "fabulous combination".

Reuters shares leapt as much as 32 percent to a five-year high of 649-3/4 pence, valuing the company at about 8.2 billion pounds, on hopes a bid would spark an auction for the world's biggest international news agency.

Media shares have surged since Tuesday when Rupert Murdoch's News Corp NWSa.N made a $5 billion bid for Wall Street Journal owner Dow Jones & Co DJ.N, which was rebuffed by Dow Jones' controlling shareholders. That $60-a-share-bid was a 65 percent premium to Dow Jones' closing price on Monday.

Thomson has been building up its financial news business and is in the process of selling its education division which analysts think could raise $5 billion.

The Toronto-based firm lies third in a financial information market dominated by Reuters and privately-owned Bloomberg, and buying Reuters would give it a clear market lead, while also offering considerable cost savings, according to analysts.

"Thomson and Reuters would be a good fit, Numis Securities analysts wrote in a research note. Other analysts said a trade buyer could pay up to 750 pence a share for Reuters.